Daily Gold Update

Source: Bill Musgrave, American Gold Exchange

Austin— Gold jumped 1.5% to close at a two-week high above $1,080 on a short-covering rally as the dollar weakened, boosting demand for alternative assets.

The dollar fell 0.3% against a basket of rivals after an inconclusive general election in Spain caused investors to shed risk, hammering European equities and boosting the euro. A falling dollar supports gold and other commodities by making them less expensive to overseas buyers.

With no party acquiring a clear majority, Spain is heading toward a coalition government that is already raising questions about the struggling nation's financial stability. European stock markets tumbled as investors shifted to cash and other safe havens, bidding up the euro and pressuring the dollar.

Gold's rise forced traders who had placed bets against the metal to cover their short positions, driving prices higher still. The other precious metals were mostly higher, with silver gaining 1.6% and platinum surging 2.4% while palladium dropped 1%.

At the Comex close: February gold jumped $15.60 to $1,080.60; March silver gained 22 cents, to $14.32; January platinum surged 21 cents to $881.30; and March palladium dropped $5.55 to $553.40 an ounce.